Baroness Sugg: My Lords, I thank all noble Lords for their comments. I recognise the significant experience of the noble Lords, Lord Bradshaw, Lord Wigley and Lord Anderson, and many others in this area over many years. I will aim to address the questions that have been raised, but if I fail to do so I will follow up in writing.
The noble Lords, Lord Tunnicliffe and Lord Wigley, raised the issue of the wider devolution of infrastructure funding. The Government believe it is not desirable to reopen general discussion on Silk recommendations around which there is no consensus, so we do not intend to revisit the question of devolving Network Rail funding. As part of Network Rail’s devolution arrangements, the Welsh Government will be represented on the Wales route supervisory board, and the board will work in partnership to drive improvements for customers in the Wales and borders area and hold the industry to account.
The noble Lord, Lord Wigley, raised the issue of the delay in this order. I acknowledge that delay but reassure him that the delay in transferring the rail powers to Welsh Ministers has not adversely affected the procurement process for the next franchise. The formal transfer of powers has required the resolution of a number of detailed policy and practical considerations around cross-border services, which has taken longer than anticipated. However, we have been working closely with the Welsh Government to ensure that they can proceed in a timely manner with the franchise procurement. The ongoing procurement of the next franchise is being facilitated through agency agreements, enabling Welsh Ministers to exercise the Secretary of State’s relevant functions in advance of the order being made.
The noble Lord, Lord Bradshaw, asked about wider government spending in Wales. The department will continue to liaise closely with the Welsh Government on the specification funding of Network Rail’s operations in England and Wales for each of the five-year railway control periods to ensure that the requirements for Wales for increased capacity on the network are reflected.  We are investing a record amount in Wales infrastructure and our spending goes where it is most needed, where it delivers the greatest value for money and we make decisions for both England and Wales based on a rigorous and fair appraisal process that ensures that.
The noble Lord, Lord Tunnicliffe, and others mentioned the Cardiff Valley Lines, and I will go into some detail on that. As part of the procurement, the Government are leading on the development of proposals for the creation of the South Wales Metro and, alongside refranchising Wales and borders services, the Welsh Government seek to take ownership of the core Valley Lines infrastructure from Network Rail. They then intend to vertically integrate the core Valley Lines by contracting a supplier to run trains and manage the infrastructure.
The Secretary of State has been very clear that he wants the rail industry to work more closely together to deliver better services for passengers and is pleased that the Welsh Government Cabinet Secretary for Economy and Infrastructure, Ken Skates, supports that. Following the comments of the noble Lord, Lord Jones, I am pleased to confirm that we work very closely with Mr Skates and will continue to do so.
The Welsh Government are working closely with Network Rail to agree the principles for the proposed transfer of the core Valley Lines infrastructure. Although the Government support the proposal in principle, it will be subject to final agreement and recommendation of approval by Network Rail. If agreed, it is expected that the ownership of the core Valley Lines infrastructure would transfer between autumn 2019 and spring 2020.
The Cardiff region is benefiting from millions of pounds of UK Government investment. This includes £125 million towards upgrade of the Valley Lines, which has been incorporated in a wider contribution of £500 million to the Cardiff capital regional investment fund. The agreement in principle to provide funding towards the upgrade of the Valley Lines was conditional on the Welsh Government taking over sponsorship of the project and being liable for costs and risks of all elements of the project, so the Welsh Government will have full freedom to optimise the final scope of the scheme so as to achieve the best value for money but, in direct answer to the question of the noble Lord, Lord Tunnicliffe, they will be responsible for any overspend there. The Welsh Government agree that this is a final settlement between the two Governments in relation to the costs, so they will not subsequently seek further UK Government funding for that.
The noble Lord, Lord Jones, mentioned HS2 and Crewe. HS2 will significantly benefit Wales through faster journey times between north Wales and London via Crewe. We continue to support the vision for a Crewe hub station. He also raised some issues that passengers face. I am pleased that he enjoys the Chester to London line and very much hope that the new franchising agreements will improve services across Wales and in the cross-border areas. On his specific questions about the Wrexham-Bidston line, the Secretary  of State has agreed to fund the development of a strategic outline business case for improvements to line speeds on that line, and on the north-west main line. We are working closely with the Welsh Government to assist them in their development work on that. On Chester station, again, we are providing assistance and advice to Cheshire West and Chester Council as it develops a business case for Chester station for consideration for DfT funding.
The noble Lord, Lord Bradshaw, asked about variation of terms and conditions and pensions in the new franchise. Employment terms and conditions are not directly impacted by the order. It will be a matter for Welsh Ministers and bidders to address in the context of the procurement process. In the normal course of events, the employees of a train operating company which ceases to run a franchise will be protected by  the transfer of undertakings regulations, and their employment contracts will transfer to the new train operating company by that operation. Safety is of course paramount, and I assure the noble Lord that the Office of Rail and Road will remain the safety and economic regulator for infrastructure in Wales.
The noble Lord, Lord Anderson, highlighted the cancellation of electrification. We remain committed to delivering outcomes for rail transport in Wales but will commit to electrified lines only where they provide a genuine benefit for passengers. As the noble Lord will know, the recent reappraisal found that that would be poor value for money.
The introduction of bimodal intercity express trains means that journey times have improved, and we are working with the Welsh Government, who are taking a similar passenger benefits-focused approach to the procurement of the South Wales Metro. Once the whole new fleet is introduced and electrification to Cardiff is complete, passengers will benefit from 40% more seats in the morning peak and journey times between Swansea and London and other stations along the route will be approximately 15 minutes shorter. We will continue to work with the Welsh Government to make improvements where we can.
I hope that that has addressed all the questions. If I have missed anything, I will follow up in writing.
The devolution approach that we have chosen recognises the inherently joint nature of a significant proportion of the Wales and borders franchise and ensures that the current extensive cross-links will be maintained and developed for the benefit of passengers and Welsh and English border economies. I hope that noble Lords will agree that the devolution of these rail powers is an example of effective co-operation between the UK and Welsh Governments. We will continue to support the Welsh Government to enable them to achieve the successful procurement of the next franchise, and expect that the new franchise will improve rail travel in Wales and the English border areas in the coming years. I welcome the broad approval of noble Lords for this and commend the regulations to the House.
Motion agreed.